Pearanda vs.

Baganga
In June 1999, Pearanda was hired by Baganga Plywood Corporation (owned by Hudson Chua) to take
charge of the operations and maintenance of its steam plant boiler. Pearanda was employed as a
Foreman/Boiler Head/Shift Engineer tasked to do the following tasks among others:
1. To supply the required and continuous steam to all consuming units at minimum cost.
2. To supervise, check and monitor manpower workmanship as well as operation of boiler and
accessories.
3. To evaluate performance of machinery and manpower.
5. To train new employees for effective and safety while working.
6. To recommend personnel actions such as: promotion, or disciplinary action.
In 2001, BPC shut down due to some repairs and maintenance. BPC did not technically fire Pearanda
but due to the latters insistence, BPC gave him his separation benefits. BPC subsequently reopened but
Pearanda did not reapply. Pearanda now claims that BPC still needed to pay him his overtime pays
and premium pays. The NLRC ruled that Pearanda is a managerial employee and as such he is not
entitled to overtime and premium pay as stated under the Labor Code. Pearanda appealed. He said
that he is not a managerial employee.
ISSUE: Whether or not Pearanda is entitled to overtime and premium pay.
HELD: No. Though there is an error made by the NLRC in finding Pearanda as a managerial employee,
the Supreme Court still ruled that Pearanda is not entitled to overtime and premium pay.
Pearanda is not a managerial employee. Under the Implementing Rules and Regulations of the Labor
Code, managerial employees are those that perform the following:
(1) Their primary duty consists of the management of the establishment in which they are employed or
of a department or subdivision thereof;
(2) They customarily and regularly direct the work of two or more employees therein;
(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to the promotion or any other change of status of
other employees are given particular weight.Pearanda does not meet the above requirements.
Pearanda is instead considered as a managerial staff. Under the Implementing Rules and Regulations of
the Labor Code, managerial staffs are those that perform the following:
(1) The primary duty consists of the performance of work directly related to management policies of
the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists
of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute
under general supervision work along specialized or technical lines requiring special training, experience,
or knowledge; or (iii) execute under general supervision special assignments and tasks; and
(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which
are not directly and closely related to the performance of the work described in paragraphs (1), (2), and
(3) above.
Pearandas function as a shift engineer illustrates that he was a member of the managerial staff. His
duties and responsibilities conform to the definition of a member of a managerial staff under the
Implementing Rules.
Pearanda supervised the engineering section of the steam plant boiler. His work involved overseeing
the operation of the machines and the performance of the workers in the engineering section. This work
necessarily required the use of discretion and independent judgment to ensure the proper functioning
of the steam plant boiler. Further, Pearanda in his position paper admitted that he was a supervisor for
BPC. As supervisor, petitioner is deemed a member of the managerial staff.